United States: Looking Beyond The Label For Inducement In Post-Launch Case

Addressing objections to a magistrate's report and
recommendation, a Delaware district court held that a generic
manufacturer's label showing an intent to induce infringement
was not enough on its own to establish induced infringement in a
post-launch case, and that evidence of actual inducement was
required. GlaxoSmithKline LLC v. Glenmark Pharms. Inc.,
USA, Case No. 14-cv-877 (D. Del., June 9, 2017) (Stark, J).
The court found that post-launch cases differ from pre-launch
cases, since evidence of actual inducement (if such occurred) would
be available in the former but not the latter.

The dispute before the court arose from a magistrate judge's
report and recommendation regarding a summary judgment motion by
the defendants seeking a finding of no induced infringement.
Induced infringement requires a plaintiff to show both intent to
induce infringement and actual inducement. Courts tend to focus on
the intent element as evidenced by a generic drug's label in
pre-launch Hatch-Waxman cases, because there can be no evidence of
actual inducement before a drug is on the market.

Defendants argued that because this was a post-launch case,
evidence of intent based on the label was not sufficient to support
a finding of inducement. They moved for summary judgment, arguing
that they had introduced undisputed evidence that doctors do not
actually read the drug label when prescribing, so there could be no
actual inducement. Plaintiffs disagreed, arguing both that the
label was sufficient evidence of inducement on its own regardless
of the drug's launch status and that whether the label actually
induced infringement was a genuinely contested issue of fact. The
magistrate agreed with defendants that plaintiffs would have to
show evidence of actual inducement, but denied summary judgment on
the basis that plaintiffs had introduced sufficient circumstantial
evidence of inducement to survive summary judgment.

Both sides objected to the magistrate's order. Plaintiffs
again argued that there was a per se rule that intent to
induce infringement as shown by a generic label is sufficient for a
finding of induced infringement, and defendants argued that the
magistrate had erred in finding a genuine issue of material
fact.

Judge Stark overruled both parties' objections and adopted
the magistrate's report. In doing so, he made clear that there
is a valid reason for distinguishing between inducement in
pre-launch and post-launch cases based on the evidence available.
He also clarified, however, that plaintiffs need not provide direct
evidence of actual inducement in order to prevail on an induced
infringement claim. Instead, "so long as there is
circumstantial evidence that could lead a factfinder to believe
that the alleged acts of encouragement led to some amount of
'successful communication' between the alleged inducer . .
. and the third-party direct infringer," the induced
infringement standard would be satisfied.

Practice Note:

Be aware of the distinctions between the induced infringement
standards for pre-launch and post-launch cases, and adjust your
case theories accordingly.

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